Allowable deductions reduce taxable income; whereas, tax offsets directly reduce the amount of tax payable on your taxable income. They provide greater benefit. Often, tax offsets referred to as rebates. In general, tax offsets can reduce your tax payable to zero but on their own they can’t get you a refund.

What offsets are available?

Benefit recipients

The beneficiary tax offset is available to taxpayers who receive certain Australian Government allowances and payments.

Taxpayers with dependants

You may be eligible for an offset if you maintained a spouse (born before 1 July 1952) or dependant relative who is an invalid or carer.

Health insurance

Your entitlement to a private health insurance rebate or tax offset depends on the age of the oldest person covered by your policy and your single or family income.

You can claim your private health insurance rebate as a:

o    premium reduction, which lowers the policy price charged by your insurer

o    refundable tax offset through your tax return.

Medical expenses

The Net medical expenses tax offset is being phased out. To be eligible to claim the offset, you must meet certain criteria and have incurred medical expenses over the applicable claim threshold. The threshold applied is dependent on your family status and adjusted taxable income (ATI). The thresholds are indexed each year.

To be eligible to claim the offset in 2014–15, you need to have received the offset in your 2013–14 income tax assessment. 2014–15 is the final year you can claim unless you have medical expenses relating to disability aids, attendant care or aged care – in this case, you can claim the tax offset for these expenses up to the 2018–19 income tax year.

Senior Australians and pensioners

Senior Australians may be eligible for the mature worker offset and/or the senior Australian or pensioner offset. Some people may be eligible for both offsets.

The mature age worker tax offset aims to encourage and reward mature age workers who stay in the workforce.


There are two superannuation-related tax offsets. These relate to your super income stream and spouse super contributions.

Low-income earners

You may be eligible for a tax offset if you are a low-income earner – for example, if you only work part time. You don’t have to claim this offset – the ATO will work it out for you when you lodge your tax return. However, minors (children under 18 years of age) can no longer access the low income tax offset to reduce the tax payable on their unearned income (for example, from interest or property).

Zones and overseas forces

You may be eligible for an overseas forces or remote zone tax offset, but not both.

Using a tax agent to lodge your tax return offers many benefits, including an extension lodgment date. For a free quote call 02 9223 9166 or submit an online enquiry here.